While everyone's attention is diverted to the maybe war in Syria, back here at home the Federal government is set to embark upon the most massive organized fraud in world history. I'm talking about the incipient effort to get the healthy assetless young to sign up for health insurance under Obamacare.
The single most obvious and intentional feature of Obamacare is that it is a bad deal for healthy young people, and particularly those who have no substantial net worth, which is nearly all of them. The whole idea here is to make insurance affordable for those for whom it currently is not, namely those who are already sick and/or old. Since the money has to come from somewhere, it has to be that the young and healthy will pay. The designers of the Act got as far in their thinking as to realize that the young and healthy aren't quite stupid enough to get into this without some level of force, and thus we have the "individual mandate," under which everyone is supposedly required to buy insurance, even those for whom it is manifestly a bad deal. The designers also got far enough to realize that merely ordering people to spend big money on a bad deal wouldn't work, and they would need some incentive. So they put in the tax penalty for failing to buy the insurance.
But unfortunately, pretty much everybody who has looked at it has realized that the tax penalty is set at a level too low to make it worthwhile for the young and healthy to buy the insurance. Add to that that the designers threw in "guaranteed issue," under which you can't be denied coverage just because you had gone without it for a while. In other words, you can go multiple years paying the tax penalties, wait until you get sick, and then buy the insurance only when you are sure that your healthcare costs will far exceed your premiums. For the young and healthy, this is clearly the right strategy for dealing with Obamacare (with undoubtedly a few exceptions for people with exceptionally high income or inherited assets). It's hard not to see a classic insurance "death spiral" developing rather quickly as the young and healthy decline to sign up.
What now? Well, to judge by some news reports and government web sites, the government's current idea is to launch a massive campaign of lies and fear to try to get the young/healthy to sign up and pay. Check out for example this July 24 article from the AP, via CBS, describing the upcoming government promotion efforts. First of all, the budget: AP gives it as $684 million! That's a pretty damning indication right there that it's not a good deal.
So what's the message? Just as an example, here's some mumbo jumbo from the HHS main page on the subject:
HHS is responsible for implementing many of the health reform changes included in the Affordable Care Act. HHS is strengthening and modernizing health care to improve patient outcomes, promoting efficiency and accountability, ensuring patient safety, encouraging shared responsibility, and working toward high-value health care. HHS also is improving access to culturally competent, quality health care for uninsured, underserved, vulnerable, older, and special needs populations. These reforms and the resulting improvements in the care provided on a day-to-day basis will improve our foundation for emergency preparedness. Stronger health care will enhance our Nation’s ability to provide extra medical care capacity when needed. Individuals and communities also will be more resilient in the face of emergencies if they are healthy and have access to quality care on a regular basis.
Well, can you please tell me if this is a good financial deal for me? How about some numbers of how much this will cost me versus my alternative strategy of waiting until I get sick and buying the insurance then? I can't find any information from HHS whatsoever on those subjects. The whole idea is to hide the truth. The closest thing I find in the long quote above is "encouraging shared responsibility." I think that means, hey 25 year old earning maybe $30,000 per year and with $50,000 of student loans-- It's your civic duty to spend a several thousand dollars a year on our spending priorities rather than your own!
The AP/CBS article is almost humorous in the lengths to which it goes to avoid using the "F" word. Here's their take on the basic government pitch:
It will make you stronger. It will give you peace of mind and make you feel like a winner. Health insurance is what the whole country has been talking about, so don’t be left out.
Sound like a sales pitch? Get ready for a lot more.
What exactly is the incremental "peace of mind" in a world of guaranteed issue? Or try this description of the effort in Colorado to find an "effective message":
There, TV commercials show people being magically transformed into champions. One minute they’re shopping for health insurance on a computer, the next they’re winning at a horse race, in a casino or at the World Series with champagne corks flying. The slogan: “When health insurance companies compete, the only winner is you.”
Well, that one is completely false and misleading, but at least it's not based on false fear like the HHS web site.
The numbers involved in this scam make all private sector frauds pale by comparison. Hell, Madoff was reported to be an approximate $60 billion scam (over 20 plus years) when measured in "Madoff dollars" (the fake money you thought you had); measured in hard dollars invested, Madoff was more like the low $20s of billions. This one is in the hundreds of billions per year. Nothing else comes close.
Of course the young and healthy with any degree of smarts are not going to be fooled. No amount of massive government spending on such a transparently phony ad campaign can possibly work. But that doesn't mean that there won't be huge collateral damage. The ones who will be fooled are the least smart and most vulnerable -- of course.